Earlier this week, Australia’s financial intelligence agency, AUSTRAC, revealed the bank was facing penalties related to money laundering and counter-terrorism laws.
At a meeting earlier today, the Westpac Board of Directors discussed AUSTRAC’s statement of claim and an “urgent response plan”, which has already kicked off.
“As a board, and as individuals, we are devastated by the issues raised by AUSTRAC in its recent statement of claim,” Westpac chairman Lindsay Maxsted said.
“The notion that any child has been hurt as a result of any failings by Westpac is deeply
distressing and we are truly sorry. The board unreservedly apologises.
“Our board, CEO and management team are fully committed to fixing these issues and we are taking all steps necessary to urgently close any remaining gaps and fix our policies and procedures so that this can never happen again.”
Mr Maxsted said the bank had “already made significant improvements”, including “reviewing and taking action on all of the individual customers mentioned by AUSTRAC and establishing a multi-layered review”.
The bank has promised to ramp up its anti-money laundering and counter-terrorism financing improvements.
“In addition, we will appoint independent experts to oversee the program including a review of accountability,” Mr Maxsted said.
“We will take actions emerging from that review. An assessment of suitably qualified candidates to lead that review is under way.
“We have also commenced discussions with relevant community groups about any further steps we can take to fight child exploitation.”
He said Westpac was continuing to work closely with AUSTRAC to “accelerate resolution of the matter”.
“The board will provide an update in coming days to share more information on what has
occurred and what steps we are taking,” he said.
AUSTRAC chief executive Nicole Rose told reporters on Wednesday the major lender hadn’t reported more than 19.5 million international funds transfers over five years.
“Westpac failed to pass on information about the origin of international funds transfers and keep records as required,” she said.
The transfers amounted to $11 billion, which Ms Rose said resulted in a “significant loss of intelligence” for the financial crimes agency.
According to an application filed by the agency to the Federal Court of Australia, Westpac allegedly failed to assess ongoing money terrorism financing risks related to the movement of money, pass on information about the source of funds and keep records relating to the origin of some of the international transfers.
AUSTRAC also alleges that part of the more than 23 million contraventions included a failure to carry out due diligence on transactions to the Philippines and South East Asia where child exploitation risks are rife.